App Marketing Costs Fall As Downloads Climb

The cost to acquire app users fell 7% in January, as the number of downloads increased.

The marketing expense for developers to gain
loyal customers -- those who open an app three+ times after downloads -- dropped from $1.67 to $1.56, per new data from Fiksu, the
mobile app marketing firm.

The dip in marketing costs reflects a typical post-holiday softening of the ad market, coupled with increased inventory from the surge in new smartphones and tablets
activated in December. The decline, however, was far smaller than a year ago when costs fell by 37% to $1.14.

Fiksu’s App Store Competitive Index, which tracks the average aggregate
daily download volume of the top 200 free U.S. iPhone apps, rose 13% from 5.3 million in December to 6 million in January. The record number of device activations on Christmas Day played a major role
in boosting app activity last month.

“We expect brands to allocate more dedicated spending to mobile advertising campaigns in 2013 and to only get savvier about aligning seasonal
spending to the ebbs and flows of user acquisition costs,” said Fiksu CEO Micah Adler, in releasing the latest index data.

The company’s platform is intended to help marketers
acquire new users and optimize campaigns on iOS and Android devices. Its system to date has logged some 81 billion app-related actions including launches, registrations, and in-app
purchases.